LITHIA MOTORS INC (LAD) Stock Fundamental Analysis
NYSE:LAD - New York Stock Exchange, Inc. - US5367971034 - Common Stock - Currency: USD
Taking everything into account, LAD scores 5 out of 10 in our fundamental rating. LAD was compared to 124 industry peers in the Specialty Retail industry. LAD has a medium profitability rating, but doesn't score so well on its financial health evaluation. LAD may be a bit undervalued, certainly considering the very reasonable score on growth
1. Profitability
1.1 Basic Checks
LAD had positive earnings in the past year.
LAD had a positive operating cash flow in the past year.
In the past 5 years LAD has always been profitable.
The reported operating cash flow has been mixed in the past 5 years: LAD reported negative operating cash flow in multiple years.
1.2 Ratios
LAD has a better Return On Assets (3.69%) than 64.52% of its industry peers.
LAD has a Return On Equity of 12.75%. This is in the better half of the industry: LAD outperforms 69.35% of its industry peers.
LAD has a Return On Invested Capital of 5.61%. This is comparable to the rest of the industry: LAD outperforms 59.68% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LAD is below the industry average of 11.79%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.69% | ||
| ROE | 12.75% | ||
| ROIC | 5.61% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
1.3 Margins
Looking at the Profit Margin, with a value of 2.40%, LAD is in the better half of the industry, outperforming 62.90% of the companies in the same industry.
LAD's Profit Margin has been stable in the last couple of years.
LAD has a better Operating Margin (4.53%) than 66.13% of its industry peers.
In the last couple of years the Operating Margin of LAD has grown nicely.
LAD's Gross Margin of 15.45% is on the low side compared to the rest of the industry. LAD is outperformed by 87.10% of its industry peers.
In the last couple of years the Gross Margin of LAD has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.53% | ||
| PM (TTM) | 2.4% | ||
| GM | 15.45% |
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so LAD is destroying value.
The number of shares outstanding for LAD has been reduced compared to 1 year ago.
The number of shares outstanding for LAD has been increased compared to 5 years ago.
The debt/assets ratio for LAD is higher compared to a year ago.
2.2 Solvency
LAD has an Altman-Z score of 2.47. This is not the best score and indicates that LAD is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.47, LAD perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
The Debt to FCF ratio of LAD is 42.52, which is on the high side as it means it would take LAD, 42.52 years of fcf income to pay off all of its debts.
LAD has a Debt to FCF ratio (42.52) which is comparable to the rest of the industry.
LAD has a Debt/Equity ratio of 1.95. This is a high value indicating a heavy dependency on external financing.
LAD's Debt to Equity ratio of 1.95 is on the low side compared to the rest of the industry. LAD is outperformed by 67.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 42.52 | ||
| Altman-Z | 2.47 |
ROIC/WACC0.64
WACC8.84%
2.3 Liquidity
LAD has a Current Ratio of 1.22. This is a normal value and indicates that LAD is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.22, LAD perfoms like the industry average, outperforming 40.32% of the companies in the same industry.
LAD has a Quick Ratio of 1.22. This is a bad value and indicates that LAD is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of LAD (0.29) is worse than 71.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
LAD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.72%.
The Earnings Per Share has been growing by 20.64% on average over the past years. This is a very strong growth
The Revenue has grown by 10.11% in the past year. This is quite good.
Measured over the past years, LAD shows a very strong growth in Revenue. The Revenue has been growing by 23.35% on average per year.
EPS 1Y (TTM)7.72%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%30.11%
Revenue 1Y (TTM)10.11%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%3.8%
3.2 Future
The Earnings Per Share is expected to grow by 16.12% on average over the next years. This is quite good.
Based on estimates for the next years, LAD will show a small growth in Revenue. The Revenue will grow by 6.01% on average per year.
EPS Next Y11.55%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
EPS Next 5Y16.12%
Revenue Next Year4.71%
Revenue Next 2Y5.26%
Revenue Next 3Y6.44%
Revenue Next 5Y6.01%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 8.98, the valuation of LAD can be described as reasonable.
Based on the Price/Earnings ratio, LAD is valued cheaper than 87.90% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.82, LAD is valued rather cheaply.
With a Price/Forward Earnings ratio of 8.06, the valuation of LAD can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LAD indicates a rather cheap valuation: LAD is cheaper than 91.13% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.24, LAD is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.98 | ||
| Fwd PE | 8.06 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LAD is valued a bit cheaper than the industry average as 66.13% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, LAD is valued a bit cheaper than 66.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.62 | ||
| EV/EBITDA | 8.34 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
LAD's earnings are expected to grow with 12.89% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.78
PEG (5Y)0.44
EPS Next 2Y12.3%
EPS Next 3Y12.89%
5. Dividend
5.1 Amount
LAD has a yearly dividend return of 0.71%, which is pretty low.
Compared to an average industry Dividend Yield of 5.90, LAD pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.36, LAD's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
5.2 History
On average, the dividend of LAD grows each year by 11.85%, which is quite nice.
LAD has been paying a dividend for at least 10 years, so it has a reliable track record.
LAD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.85%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
LAD pays out 6.34% of its income as dividend. This is a sustainable payout ratio.
LAD's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP6.34%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
304.57
+3.69 (+1.23%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners110.33%
Inst Owner Change-10.43%
Ins Owners0.87%
Ins Owner Change-0.44%
Market Cap7.93B
Analysts84
Price Target401.83 (31.93%)
Short Float %6.15%
Short Ratio6.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
Yearly Dividend2.1
Dividend Growth(5Y)11.85%
DP6.34%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.06%
Min EPS beat(2)-1.6%
Max EPS beat(2)9.71%
EPS beat(4)3
Avg EPS beat(4)5.43%
Min EPS beat(4)-1.6%
Max EPS beat(4)9.71%
EPS beat(8)4
Avg EPS beat(8)-0.11%
EPS beat(12)5
Avg EPS beat(12)-0.63%
EPS beat(16)8
Avg EPS beat(16)2.53%
Revenue beat(2)0
Avg Revenue beat(2)-2.19%
Min Revenue beat(2)-2.33%
Max Revenue beat(2)-2.05%
Revenue beat(4)1
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.33%
Revenue beat(8)1
Avg Revenue beat(8)-1.98%
Revenue beat(12)2
Avg Revenue beat(12)-2.05%
Revenue beat(16)5
Avg Revenue beat(16)-0.86%
PT rev (1m)0.83%
PT rev (3m)1.63%
EPS NQ rev (1m)3.69%
EPS NQ rev (3m)-2.49%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-1.59%
Revenue NQ rev (3m)-4.97%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.98 | ||
| Fwd PE | 8.06 | ||
| P/S | 0.21 | ||
| P/FCF | 24.62 | ||
| P/OCF | 12.94 | ||
| P/B | 1.13 | ||
| P/tB | 4.54 | ||
| EV/EBITDA | 8.34 |
EPS(TTM)33.9
EY11.13%
EPS(NY)37.81
Fwd EY12.41%
FCF(TTM)12.37
FCFY4.06%
OCF(TTM)23.53
OCFY7.73%
SpS1427.42
BVpS268.4
TBVpS67.03
PEG (NY)0.78
PEG (5Y)0.44
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.69% | ||
| ROE | 12.75% | ||
| ROCE | 9.53% | ||
| ROIC | 5.61% | ||
| ROICexc | 5.67% | ||
| ROICexgc | 7.4% | ||
| OM | 4.53% | ||
| PM (TTM) | 2.4% | ||
| GM | 15.45% | ||
| FCFM | 0.87% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
ROICexc(3y)7.8%
ROICexc(5y)8.76%
ROICexgc(3y)10.26%
ROICexgc(5y)11.04%
ROCE(3y)12.38%
ROCE(5y)13.83%
ROICexcg growth 3Y-22.88%
ROICexcg growth 5Y-1.28%
ROICexc growth 3Y-24.14%
ROICexc growth 5Y-3.26%
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
F-Score6
Asset Turnover1.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 42.52 | ||
| Debt/EBITDA | 6.91 | ||
| Cap/Depr | 100.87% | ||
| Cap/Sales | 0.78% | ||
| Interest Coverage | 2.29 | ||
| Cash Conversion | 31.1% | ||
| Profit Quality | 36.14% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z | 2.47 |
F-Score6
WACC8.84%
ROIC/WACC0.64
Cap/Depr(3y)135.76%
Cap/Depr(5y)158.69%
Cap/Sales(3y)0.93%
Cap/Sales(5y)1.04%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)7.72%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%30.11%
EPS Next Y11.55%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
EPS Next 5Y16.12%
Revenue 1Y (TTM)10.11%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%3.8%
Revenue Next Year4.71%
Revenue Next 2Y5.26%
Revenue Next 3Y6.44%
Revenue Next 5Y6.01%
EBIT growth 1Y4.38%
EBIT growth 3Y-1.94%
EBIT growth 5Y26.57%
EBIT Next Year17.19%
EBIT Next 3Y13.64%
EBIT Next 5Y11.07%
FCF growth 1Y135.41%
FCF growth 3Y-63.67%
FCF growth 5Y-28.69%
OCF growth 1Y194.86%
OCF growth 3Y-38.16%
OCF growth 5Y-4.12%